EagleTribune.com, North Andover, MA

April 26, 2008

Markets respond to growing appetite for healthier foods

By Emily Young

Healthy foods — or at least healthier versions of popular products — are big business these days.

Diet Coke Plus offers soda drinkers a "good source of vitamins B3, B6, and B12, and the minerals zinc and magnesium," according to press material. 7Up might not be all-natural, but it is made of — and marketed as — "100 percent natural flavors."

Even the candy bar industry is getting in the game by offering new items such as 100-calorie M&M packs, 3 Musketeers and Twix candy bars.

"The foundation of business is to make a profit," said Bill Zannini, coordinator of the business programs at Northern Essex Community College. "You need to find a way to do that today by addressing the needs of customer.

"People are saying, 'I don't want to be obese. I don't want health issues. I want products that will create a healthier life, whether it's the car I drive, the food I eat, maybe even clothes I wear.' That's what consumers are looking for."

In fact, nine out of 10 surveyed adults were concerned about the nutritional aspects of their diet; three out of four had changed their eating habits within the last three to five years because of health concerns; and six out of 10 were willing to pay more for healthier foods, according to a 2007 survey by the United Soybean Board.

Consumer goods companies big and small are certainly responding, as the sheer number of healthy products on the shelves can be daunting to some.

"We're overloaded right now," said Merrimack College marketing professor Joseph Stasio. "There's too much choice. Markets respond and go through cycles. When a market matures, there's usually a shake-out or consolidation. They'll slow down, and only the biggest brands will survive. The smaller brands will transition or partner with one of the bigger ones."

Big-box health kick

Amazingly, it was only 20 years ago that a select few natural food stores met the definition of a supermarket: grossing $2 million in annual sales, according to market research company Packaged Facts.

But the explosion of Whole Foods Market has changed all that. John Mackey, a 25-year-old college dropout, and Rene Lawson, his 21-year-old girlfriend, borrowed $45,000 from friends and relatives in 1978 to open a small natural foods store in Austin, Texas.

Mackey, who at times even lived in the store, merged forces with another natural grocery in 1980 and opened the original Whole Foods Market.

Fast forward to August 2007, when Whole Foods acquired a big competitor, Wild Oats Markets. Together, the companies brought in $7 billion in 2006 sales — nearly 41 percent of the natural foods industry's total sales, according to a 2007 market report by Natural Foods Merchandiser.

But the 270 Whole Foods aren't the only places to get health food these days. Mainstream supermarkets are responding to the trend — and people are buying into it. For example, 68 percent of 2007 sales of soy food and beverages were rung up at mainstream supermarkets and super centers, estimates Packaged Facts.

Wal-Mart moved to double its selection of organic foods in the spring of 2006. And Stop & Shop Supermarkets not only features a natural foods section these days but also produces a line of its own store brand, Nature's Promise, consisting of natural and organic foods often priced lower than other brands.

Marketing itself as the region's largest "certified organic" supermarket, Hannaford Supermarkets offers healthy options throughout its retail space in addition to its own organic line, Nature's Place. The company also helps customers navigate the choices in its aisles with its Guiding Stars program, giving items one, two or three stars based on nutritional value.

But consumers shouldn't solely rely on splashy labels.

"I'm amazed at how we take it all at face value," Zannini said. "Americans spend billions on bottled water, and we have no clue where that water in coming from. It could be from some spring in Maine, or it could be from somebody's tap with a filter. But because it's bottled, we believe it to be better."

Both Stasio and Zannini encourage consumers to do their own digging and verify the source and accuracy of a product's health claims.

"Don't be so quick to accept," Stasio said. "It will require a little work. But buyer beware if you don't do the work."